Universal Secure Registry (USR) has filed a patent infringement lawsuit against Apple. The founder, chairman and CEO of USR is recognized expert is the fields of information systems security and identity authentication, especially computer-based multifactor identity authentication. Before starting USR, Dr. Weiss founded and served for many years as the CTO and Chairman of the Board of Security Dynamics Technologies Inc., now RSA Security LLC, a part of Dell Technologies. Dr. Weiss invented the SecurID tokens and their underlying algorithm: technology that became a leading form of personal identity authentication for computer security and electronic commerce. Dr. Weiss' SecurID technology is being used by more than 150 million people, more than 90% of Fortune 500 companies, and corporations, consumers, governments, and banks in more than 30 countries. His technology has been used by all three branches of the United States government, including the Defense Department, the Treasury Department, the Senate, and the White House. The lawsuit claims that USR had meetings with Visa and sent a series of letters to Apple in the hopes of forming a partnership. USR claims that Apple and Visa then formed their own partnership leaving them out even though it was his original patented concept.

A sample image of the USR ID application running on an iPhone is shown below

While Patently Apple covered the New York Times original story on this lawsuit last week in a report titled "Apple Sued by Universal Secure Registry for Patent Infringement regarding Apple Pay," the NYTimes report was only a simple general overview.

Now the full lawsuit has been published and available to view. Below is a broader overview of the lawsuit that covers four specific patents that they allege have been infringed upon by Apple and Visa: 8,577,813, 8,856,539, 9,100,826 and 9,530,137.

Acts Giving Rise to this Action

The patent infringement lawsuit filed by Universal Secure Registry LLC contains a segment titled "Acts Giving Rise to this Action" that provides us with an overview of the case against Apple Inc., Visa Inc., and Visa U.S.A. as follows:

"At the iPhone 6 launch event in September of 2014, Apple CEO Tim Cook explained: 'payments is a huge business. Every day between credit and debit we spend $12 billion. That's over $4 trillion a year and that's just in the United States. And this business is comprised of over 200 million transactions a day.' For decades, in a typical transaction, a customer would slide his or her card through a point-of-sale ("POS") device at a merchant checkout location, and the POS device would read information such as card number and expiration date from a magnetic strip on the back of the card. That information would pass through a card network, such as Visa or MasterCard networks, and ultimately to the issuing bank for transaction approval (or disapproval).

The traditional magnetic strip lacks adequate security and is highly susceptible to fraud. In an attempt to reduce fraud, a consortium of payment-card companies introduced the "EMV chip" into payment cards, which made them more difficult to copy. But cards with the EMV chip, too, are insecure. For example, an EMV chip does not prevent a nefarious actor from carrying out unauthorized transactions using a stolen card, or from intercepting and fraudulently using card information that is transmitted during an ordinary transaction.

Thus, the need existed for technology that would allow consumers to make payment-card transactions conveniently and with a high-degree of security. Recognizing very early on—long before Apple, Visa, and others in the payment industry—that mobile phones and other personal electronic devices provided an optimal platform to meet this need, Dr. Weiss developed and patented superior technology using such devices to provide a mobile, efficient, and highly secure system for making payment-card transactions. Dr. Weiss was the first in this space, and the secure payment technology that he developed is the core of Apple Pay.

Recognizing the enormous promise of his technology, Dr. Weiss and USR sought to partner with both and Apple and Visa to develop a commercial implementation. To that end, Dr. Weiss and USR disclosed their patented technology to Apple and Visa a number of years before the development and release of Apple Pay.

In 2010, USR sent Apple a series of letters describing USR's patented technology. On July 14, 2010, USR sent Apple a letter seeking to partner with Apple to jointly develop a payment-card solution that "is integrated with and centers around a software-modified payment phone."

In another letter sent to Apple on September 7, 2010, USR further elaborated that its patented technology, which employed smart mobile devices for secure financial transactions, "eliminates the need for account numbers or any sensitive or private information to be stored in or transmitted from a smart mobile device." That letter also explained that one of USR's allowed patent applications "employ[s] a biometric for identity authentication on a smart phone." On September 21, 2010, USR sent Apple another letter touting the potential benefit of incorporating USR's technology into the iPhone platform, and describing USR's growing patent portfolio.

Around the same time, USR pursued a partnership with Visa Inc. In mid-2010, Dr. Weiss and USR engaged in a series of confidential discussions with senior representatives of Visa, including then-Chairman and CEO, Joseph Saunders, and then-Global Head of Strategy and Corporate Development, Oliver Jenkyn. During these discussions, USR made detailed presentations of USR's patented technology under protection of a Non-Disclosure Agreement.

Neither Apple nor Visa ever partnered with USR. Instead, they partnered with each other and with other payment networks and banks to incorporate USR's patented technology into a service called Apple Pay, which works in conjunction with Apple products, like iPhones, iPads, Apple watches, and various Mac computers. Upon information and belief, Apple and Visa began working together on Apple Pay at least as early as January 2013, and Visa dedicated approximately 1,000 people towards the development project with Apple.

On September 9, 2014, Apple publicly launched Apple Pay in its keynote address introducing the iPhone 6. In this address, Apple touted the same benefits that USR had introduced to Apple and Visa in 2010. For instance, just as USR disclosed to Apple and Visa that its patented technology eliminated the need to store or transmit payment-card account numbers, Apple bragged to its users that with Apple Pay, "the credit card isn't stored on the device." Since then, Apple Pay's growth has been explosive.

Defendant Visa operates the world's largest payment processing network called VisaNet. Upon information and belief, VisaNet is capable of handling more than 24,000 transaction messages per second and processes more than 150 million transactions every day. Upon information and belief, Visa teamed with Apple to develop and incorporate the Apple Pay service into Apple's iOS devices, enabling users to employ their Visa cards as a part of Apple Pay transactions processed using the Visa Token Service, a digital and mobile payment service developed in conjunction with Apple Pay. On information and belief, since Apple Pay launched in 2014, Visa has supported and processed all Apple Pay transactions made with Visa cards.

Many Delaware-based banks issue US-branded payment cards. Upon information and belief, Apple Pay supports these payment cards and most partner-branded Visa payment cards. Not only do these third-party banks issue payment cards that support Apple Pay, they also authorize and facilitate financial transactions made using Apple Pay. Upon information and belief, these same Delaware-based banks have agreements with Defendants regarding the processing and support of financial transactions made through Apple Pay.

Upon information and belief, at least the following Apple devices support Apple Pay and infringe one or more claims of the Asserted Patents literally and/or under the doctrine of equivalents: Apple iPhone 7, iPhone 7 Plus, iPhone 6s, iPhone 6s Plus, iPhone 6, iPhone 6 Plus, iPhone SE, iPhone 5, 5s and 5c (paired with Apple Watch), iPad (5th generation), iPad Pro (12.9-inch), iPad pro (9.7-inch), iPad Air 2, iPad mini 4, iPad mini 3, Apple Watch Series 2, Apple Watch Series 1, Apple Watch (1st generation), MacBook Pro with Touch ID, and all Mac models introduced in 2012 or later (with an Apple Pay-enabled iPhone or Apple Watch) (collectively, "Accused Apple Devices"). See "Apple Pay is compatible with these devices," available at https://support.apple.com/en-us/KM207105. Each of the Accused Apple Devices alone, or in combination with one or more other Apple devices, and the Visa payment processing network, the Visa Token Service, and associated Apple and Visa backend servers and systems supporting Apple Pay transactions (collectively, the "Accused Products"), practices USR's patented technology described and claimed in the Asserted Patents.

In short, Defendants have made extensive use of USR's patented technologies, including the technology described and claimed in the Asserted Patents. USR has no choice but to defend its proprietary and patented technology. USR thus requests that this Court award it damages sufficient to compensate for Defendants' infringement of the Asserted Patents, find this case exceptional and award USR its attorneys' fees and costs, and grant an injunction against Defendants to prevent ongoing infringement of the Asserted Patents.

Below Patently Apple provides you with a Scribd document covering the full patent infringement lawsuit filed with the court so that legal professionals and geeks can get sink their teeth into the details of each count in the case.

Patent Infringement Lawsuit - USR v. APPLE and VISA - May 2017 by Jack Purcher on Scribd

The patent infringement case presented in today's report was filed in the Delaware District Court, Wilmington Office. The Referring Judge in this case is noted as being Judge Mary Pat Thynge.

Side Note: One of the main points of this lawsuit was USR having met with Visa executives but only sending Apple a series of letters about their idea. Apple's Legal site makes it clear about idea submissions:

"Apple or any of its employees do not accept or consider unsolicited ideas, including ideas for new advertising campaigns, new promotions, new or improved products or technologies, product enhancements, processes, materials, marketing plans or new product names. Please do not submit any unsolicited ideas, original creative artwork, suggestions or other works (“submissions”) in any form to Apple or any of its employees. The sole purpose of this policy is to avoid potential misunderstandings or disputes when Apple’s products or marketing strategies might seem similar to ideas submitted to Apple. If, despite our request that you not send us your ideas, you still submit them, then regardless of what your letter says, the following terms shall apply to your submissions."

Terms of Idea Submissions

Apple's site further notes that "You agree that: (1) your submissions and their contents will automatically become the property of Apple, without any compensation to you; (2) Apple may use or redistribute the submissions and their contents for any purpose and in any way; (3) there is no obligation for Apple to review the submission; and (4) there is no obligation to keep any submissions confidential."

For more on this, see Apple's Legal web page titled "Unsolicited Idea Submission Policy."

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